Cautious Winter Haven Hospital Budget Doesn't Deter Rising Fees

Tuesday

Oct 2, 2012 at 10:50 PM

Winter Haven Hospital has a cautious budget for the fiscal year that started Monday; still its rates will be going up. The overall 8.6 percent rate increase is slightly lower than last fall's 9 percent increase.

By ROBIN WILLIAMS ADAMSTHE LEDGER

WINTER HAVEN | Winter Haven Hospital has a cautious budget for the fiscal year that started Monday; still its rates will be going up.

The latest increase will include a change in the daily rate for rooms. The cheapest will be $1,445, up from $1,383. A medical surgical private room will be $1,503 a day, up from $1,438.

Hospital officials say their caution stems from navigating a health-care landscape in which government funding keeps changing.

The expected amount of revenue beyond expenses is projected at $4.3 million for 2012-13, lower than the $5.2 million profit projected in the 2011-12 budget.

That's also called operating margin, money that goes into the hospital's coffers. It pays for improvements such as ongoing renovation of patient floors, the move into a hospital-wide electronic medical record, modernizing its interventional radiology program this year and a planned re-do of Regency Center for Women and Infants.

Another 2013 project awaited by surgeons and patients will be filling in and equipping two additional operating rooms. Six operating rooms were built in a 2008-09 expansion, but two of them had been left as shells, said David MacDougall, WHH vice president and chief financial officer.

The hospital has a $28.3 million capital budget for 2012-2013, which includes those projects and many more.

WHH expects revenue for the current year, which ended Sept. 30, to be close to the $5.2 million expected a year ago, MacDougall said. Having more patients than expected is helping that.

"We think we're in a good position in a difficult environment," said Lance Anastasio, president and chief executive officer.

"Revenue has grown faster than our expenses," MacDougall said, adding "2012 has been one of our strongest years in probably a decade."

Nevertheless, hospital officials said, they are being cautious.

Medicaid funding is one reason. WHH has seen $8 million in cutbacks during the past several years, MacDaougall said.

Another is the cost of technology to finish implementing the electronic medical record and other steps being taken to deal with health care reform.

WHH has spent more than $25 million from 2007 toward implementing the electronic system. If it meets the guidelines for that electronic record, WHH will get some reimbursement from the government.

The hospital's financial picture would be worse if not for a collaboration with Polk County and the Polk HealthCare Plan.

Working together, they have been able to benefit from about $5 million in federal matching funds to offset the $8 million in Medicaid cuts.

Other Polk hospitals have gotten funds that way also, MacDougall said.

In the 2012-13 budget, total revenue for Mid-Florida Medical Services, its parent company, appears as almost $1.4 billion.

It's a different story once you take away all the deductions for charity care, bad debt, set government rates and discounted plans.

Even with grants and some other assistance, WHH is left with $269 million in total net revenue it actually can spend.

Subtract $266.4 million in total operating expenses, add some investment income and the budget ends up at $4.3 million in profit or operating margin, which goes back into the hospital, its administrators point out.

More budget detail is provided in the accompanying chart, using information supplied by the hospital.

[ Robin Williams Adams can be reached at robin.adams@theledger.com or 863-802-7558. Read her blog at robinsrx.blogs.theledger.com. Follow on Twitter @ledgerROBIN. ]